Wrap Text
GDO - Gold One International Limited - Quarterly Activities Report
Gold One International Limited
Registered in Western Australia under the Corporations Act, 2001 (Cth)
Registration number ACN: 094 265 746
Registered as an external company in the Republic of South Africa
Registration number: 2009/000032/10
Share code on the ASX/JSE: GDO
OTCQX International: GLDZY
ISIN: AU000000GDO5
("Gold One" or the "company")
Quarterly Activities Report
Quarter Ended 30 June 2011
June 2011 Quarter Highlights
- 28,511 ounces of gold production resulting in the net cash flow from
operations increasing quarter on quarter by 39% to US$ 15.59 million
- Cash and gold receivables balance increased quarter on quarter by 35% to
US$ 25.13 million
- Modder East quarterly cash cost of US$ 541/oz
- Introduction of strategic partner and cash offer of A$ 0.55 per share
- Successful offer to acquire gold producer Rand Uranium for US$ 250 million
- Excellent safety results with a lost-time injury-free quarter
- Positive progress of projects including confirmation of a high grade
payshoot extension at Ventersburg and positive Black Reef intersection at
Modder North
September 2011 Quarter Outlook
- Quarterly production guidance of 34,000 ounces and annual production target
of 120,000 ounces remains on track
- Company well positioned to complete the introduction of new strategic
partners pursuant to the placement and cash offer announced on 16 May,
2011, during the December 2011 quarter
- Conditions precedent for the Goliath Gold transaction are expected to be
fulfilled or waived, as the case may be, by the end of the quarter
June 2011 Quarter Key Performance Data
(Average Exchange Rate of ZAR 6.75 / US$ 1)
(March 2011 Quarter Average Exchange Rate of ZAR 6.98 / US$ 1)
June 2011 Quarter Modder Sub Total March 2011
East Nigel Quarter
Ore Mined 158 226 t 6 713 t 164 939 128 335 t
Underground
Mined Grade 7.03 g/t 3.55 g/t 6.89 g/t 8.53 g/t
Milled Tonnes 150 043 t 7 840 t 157 883 125 091 t
Recovered Grade 5.74 g/t 3.29 g/t 5.62 g/t 6.51 g/t
Gold Recovery 96% 92% 96% 96%
Gold Produced 27 683 oz 828 oz 28 511 26 188 oz
oz
Modder East Cash US$ 541/oz US$ 472/oz
Cost*
Modder East Cash US$ 879/oz US$ 859/oz
and Capital Cost
Group Development US$ 9.36 million US$ 10.39
and Capex million
Group Gold Revenue US$ 43.08 million US$ 35.42
million
Average Gold Price US$ 1,510/oz US$ 1 384/oz
Received
*Cash cost refers to all costs directly associated with mining activities, mine
administration, processing and refining.
2011 Half-Year Key Performance Data
(Average Exchange Rate of ZAR 6.87 / US$ 1)
2011 Half-Year Modder East Sub Nigel Total
Ore Mined 282 621 t 10 653 t 293 274 t
Underground
Mined Grade 7.76 g/t 3.56 g/t 7.61 g/t
Milled Tonnes 273 651 t 9 323 t 282 974 t
Recovered Grade 6.11 g/t 3.32 g/t 6.01 g/t
Gold Recovery 96% 92% 96%
Gold Produced 53 706 oz 993 oz 54 699 oz
Modder East Cash US$ 507/oz
Cost
Modder East Cash US$ 869/oz
and Capital Cost
Group Development US$ 19.75
and Capex million
Group Gold Revenue US$ 78.50
million
Average Gold Price US$ 1 446/oz
Received
1. CEO`s Review
The June 2011 quarter represents yet another quarter of continued production
growth for Gold One with 28,511 ounces of gold having been produced. This is
particularly pleasing in light of the many Easter public holidays which,
although planned, were still very disruptive to the operations. This gold
production represents an 8.9% increase relative to the March 2011 quarter`s
production of 26,188 ounces and also exceeds the June quarter`s guidance of
28,000 ounces. Total production for the first half of 2011 therefore amounts to
54,699 ounces. With the continued production ramp up on track, the company is
well positioned to achieve its annual gold production target of 120,000 ounces.
I am further pleased to report that our South African operations had a lost-time
injury-free quarter, which has, in turn, reduced the progressive lost-time
injury frequency rate per 200,000 hours ("LTIFR") for 2011 to 0.86;
significantly below the Australian LTIFR benchmark of one.
During the quarter under review, stoping at Modder East negotiated a thinning of
the Buckshot Pyrite Leader Zone ("BPLZ"), resulting in Black Reef mined grades
being 13% lower than in the previous quarter. Lower grades were offset by
higher volumes, which increased by 27% to 158,226 tonnes. The grade for the
September 2011 quarter is subsequently expected to normalise now that this
geological feature has been negotiated.
The higher volumes had a positive impact with unit costs reducing by 6.7% from
ZAR 802.89 per tonne milled in the March 2011 quarter to ZAR 749.12 per tonne
milled in the quarter under review. Due to the lower grade the cash cost
increased by 15% from the previous quarter to US$ 541/oz for the June 2011
quarter. Total cost* for the quarter was US$ 763/oz. The strong South African
rand has a negative impact when translating to US dollar per ounce costs.
The company`s strong operational performance, combined with higher gold prices,
resulted in a significant increase in operating cash flow for the quarter,
increasing operating cash flow to US$ 24.95 million. After development and
capital expenditure of US$ 9.36 million, the group generated a net cash flow
from operations of US$ 15.59 million; 39% higher than the previous quarter`s US$
11.19 million. Gold One ended the first half of 2011 with US$ 25.13 million of
cash on hand and gold receivables (including restricted cash of US$ 5.28
million), compared to an end of March 2011 quarter cash on hand and receivables
balance of US$ 18.67 million (including restricted cash of US$ 5.29 million).
Figure 1: Quarterly Group Gold Production
(For the release with pictures and schematics, please refer to the company`s
website: www.gold1.co.za)
Gold One has made good progress with several of the initiatives in its project
pipeline. At Ventersburg, the pre-feasibility study that was completed at the
end of the March 2011 quarter underwent extensive review by the company during
the June 2011 quarter. Following the review, it was anticipated that the pre-
feasibility study could potentially be significantly optimised and enhanced
through the addition of shallower resources, which could facilitate more rapid
orebody access. In this regard, a possible shallow extension to the eastern most
payshoot was modelled and drilling to date has yielded favourable results. This
drilling is planned to be completed by the beginning of the December 2011
quarter and the updated pre-feasibility study is to be completed by the end of
this year.
At Megamine, desktop studies that were undertaken during 2010 are continuing,
including the capturing of historical data with a particular focus on the Wit
Nigel property, being the southern property contiguous to Megamine comprising
the prospecting right belonging to Goliath Gold Mining Limited ("Goliath Gold"),
formerly White Water Resources Limited ("WWR"), and the areas to the east of
Megamine. This information, combined with the current surface exploration
drilling programme, will be utilised to extend the existing Megamine geological
models into the adjacent Wit Nigel prospecting area.
At Modder East, the company has concluded its 2011 exploration drilling
programme, which, when considered in conjunction with the drilling undertaken
during the December 2010 quarter, will result in additional resources in the
northeastern portion of Modder East. The results of this drilling will be
incorporated into the updated Modder East resource statement that is to be
published during the December 2011 quarter.
It is especially pleasing to report that, despite the major corporate
initiatives and acquisitions undertaken during this quarter, the company has
continued to perform above expectations suggesting that the strategy of
establishing a solid foundation, and clear role clarity between operational and
corporate development functions prior to considering external growth, has been
successful.
On the corporate front, the company announced on 28 April, 2011, that it had
made a binding offer to acquire 100% of Rand Uranium (Proprietary) Limited
("Rand Uranium") for US$ 250 million. On 16 May, 2011, Gold One also announced
that it had signed a Transaction Implementation Agreement that could result in a
change of control with a consortium of Chinese investors becoming Gold One`s
long term strategic partner and major shareholder ("Jintu transaction"). Both
of these transactions are significantly transformational for Gold One. This
corporate activity is detailed under Section 5 of this report.
The outlook for the September 2011 quarter is positive with production
anticipated at approximately 34,000 ounces. Shareholders are also expected to
meet during the September 2011 quarter to approve the introduction of Gold One`s
proposed new strategic partners.
*Total cost refers to the sum of the cash cost, depreciation and royalties.
Capital expenditure, finance costs and corporate costs are excluded from total
cost.
2. Financial Review
2.1. Overview
Cash Flow (Unaudited) June 2011 March
2011
Quarter Quarter
(US$ (US$
Million) Million)
Gold Sales 43.08 35.42
Payment to Operating Suppliers -18.13 -13.84
and Employees*
Operating Cash Flow 24.95 21.58
Development and Capital -9.36 -10.39
Expenditure
Cash Flow from Operations 15.59 11.19
Exploration -2.36 -1.66
Corporate Overheads -2.33 -0.72
Annual Bonuses -1.91 -
Bond Interest Payments -1.27 -1.27
Transaction Costs -1.26 -
Debt Facility Transaction - -0.42
Costs
Net Cash Flow 6.46 7.12
Opening Cash in Bank and Gold 18.67 11.55
Receivables
Closing Cash in Bank and Gold 25.13 18.67
Receivables
*Included in the payment to operating suppliers and employees is an amount of
US$ 2.13 million relating to capital expenditure capitalised in the March 2011
quarter and paid in the June 2011 quarter.
Group gold revenue for the quarter was US$ 43.08 million, while group cash
operating costs were US$ 18.13 million, resulting in a positive operating cash
flow of US$ 24.95 million. After development and capital expenditure of US$ 9.36
million, the group generated a net cash flow from operations of US$ 15.59
million, which is 39% higher than the March 2011 quarter`s net cash flow from
operations of US$ 11.19 million. General and administration costs for the June
2011 quarter were higher than the previous quarter`s due to transaction costs
payable for the Goliath Gold, formerly WWR, transaction, the Rand Uranium
transaction and the Jintu transaction. These transaction costs amounted to US$
1.26 million over the quarter; additional transaction costs will be incurred
during the next six months as these transactions progress to completion.
Corporate overheads for the quarter under review were also affected by foreign
exchange losses during the quarter of US$ 1.95 million. Foreign exchange losses
made during the previous quarter amounted to US$ 0.50 million.
Gold One ended 2011 mid-year with US$ 25.13 million of cash on hand and gold
receivables (including restricted cash of US$ 5.28 million), compared to an end
of March 2011 quarter cash on hand and receivables balance of US$ 18.67 million
(including restricted cash of US$ 5.29 million). The quarterly interest payment
of US$ 1.27 million on the company`s 500 convertible bonds was made in June
2011.
For the first half of 2011, Gold One generated positive cash flow from Modder
East and Sub Nigel of US$ 26.78 million from revenue of US$ 78.50 million and
operating costs of US$ 31.97 million. Development and capital expenditure for
the mid-year across the Modder East and Sub Nigel operations was US$ 19.75
million.
Figure 2: Group Gold Sales and Revenue
(For the release with pictures and schematics, please refer to the company`s
website: www.gold1.co.za)
The financial results for the first six months of the year will be published by
the end of August 2011.
3. Operational Review
During the June 2011 quarter, gold production amounted to 28,511 ounces,
relative to guidance of 28,000 ounces. This represents an 8.9%
increase compared to the March 2011 quarter`s production of 26,188
ounces. Total production for the first half of 2011 therefore amounts to 54,699
ounces, exceeding half-year guidance of 53,000 ounces.
Figure 3: Quarterly Group Gold Production
(For the release with pictures and schematics, please refer to the company`s
website: www.gold1.co.za)
3.2. Modder East
Modder East June 2011 Quarter March 2011 Quarter
Ore Mined Underground 158 226 t 124 395 t
Mined Grade 7.03 g/t 8.69 g/t
Milled Tonnes 150 043 t 123 608 t
Recovered Grade 5.74 g/t 6.55 g/t
Gold Recovery 96% 97%
Gold Produced 27 683 oz 26 023 oz
Cash Cost US$ 541/oz US$ 472/oz
During the June 2011 quarter, the total tonnes mined increased some 27% to
158,226 tonnes, compared to the previous quarter`s 124,395 tonnes. Importantly,
of this total, 11,205 tonnes were generated from footwall development that mined
through the underlying Kimberly Reef horizons. This ore was stockpiled on
surface and batch treated through the processing plant. The average mined grade
for the quarter was 7.03 grams per tonne. Excluding the low grade development
ore, the tonnes mined during the June 2011 quarter amounted to 147,021 tonnes,
an 18% increase relative to the March quarter, at a mined grade of 7.53 grams
per tonne. The associated ramp up in production resulted in an increase in
total gold production during the quarter for Modder East to 27,683 ounces.
During the quarter the lower mined grade was largely the result of mining
through a localised geological palaeohigh structure associated with thinning of
the BPLZ. This structure was associated with abnormal geotechnical conditions
that, in the interest of safety, necessitated the mining of more hanging wall
waste than usually planned. Although this feature is localised (temporarily
impacting seven of the total 62 panels mined during the quarter), this
additional dilution impacted on average mined grades during the quarter under
review but is not expected to impact grades during the September quarter of
2011.
The plans shown below illustrate the extent of mining undertaken at Modder East
during the March 2011 quarter (indicated in green on the March 2011 Quarter
Mining diagram) compared to the June 2011 quarter (indicated in blue on the June
2011 Quarter Mining diagram). Mining in the central portion of Raise Line 1
continued towards Raise Line 2, as planned. Continued mining from the western
section of Raise Line 2, combined with development and continued ledging and
stoping in Raise Line 3, formed the basis of a sustained increase in production
output. On-Reef development in Raise Line 2 and Raise Line 3 has been on
schedule, supporting the planned production increase required to achieve both
the 2011 production ramp up and, ultimately, steady state production levels.
On 8 June, 2011, Goliath Gold, formerly WWR, announced the closure of the Sub
Nigel training centre as a result of rising water levels in the Sub Nigel 1
Shaft. With the increase of face length and mining flexibility at Modder East
the eastern portion of Raise Line 1 has been converted into an underground
training centre to accommodate the underground training previously provided at
Sub Nigel.
Figure 4: March 2011 Quarter Mining (Marked in Green)
(For the release with pictures and schematics, please refer to the company`s
website: www.gold1.co.za)
Figure 5: June 2011 Quarter Mining (Marked in Blue)
(For the release with pictures and schematics, please refer to the company`s
website: www.gold1.co.za)
3.2.1. Stoping and Ledging
The June 2011 quarter saw a continued month-on-month increase in square metres
mined resulting in a 16% quarter on quarter increase to 32,652 square metres,
compared to the previous quarter`s 28,055 square metres. The quarter under
review commenced with 45 panels available for mining of which 15 were at a
ledging (establishment) stage. Additional panels were brought into production
during the quarter resulting in a total of 62 mining panels being available for
mining at the end of June 2011. Of these 62 panels, 11 are still in ledging
phase.
Figure 6: Square Metres Mined per Quarter
(For the release with pictures and schematics, please refer to the company`s
website: www.gold1.co.za)
Figure 7: Ore Tonnes Mined
(For the release with pictures and schematics, please refer to the company`s
website: www.gold1.co.za)
3.2.2. Development
During the June 2011 quarter, the focus on increasing total off-reef development
while maintaining sufficient on-reef development to sustain the planned
production ramp up was maintained. Total development metres increase by 9% to
1,488 metres, compared to the previous quarter`s 1,369 metres.
Trackless off-reef development for the June 2011 quarter was constant at 896
metres, compared to the March 2011 quarter`s 880 metres. Conventional on-reef
development increased by 27% to 429 metres and total on-reef development
increased by 24% to 456 metres. At the end of June 2011, a total of 95,106
square metres were available for mining, which at current mining rates equates
to approximately eight months of mining.
During the June 2011 quarter, assay values over a total of 275 metres of sampled
on-reef development were obtained for the BPLZ at an average in-situ grade of
13.12 grams per tonne over an optimised mining width of 134 centimetres. These
grades are consistent with grades currently being mined and confirm the
anticipated and modelled grades of future mining. In addition, the exposed
portion of the underlying Blanket Facies was sampled at an average grade of 1.34
grams per tonne over an average width of 76 centimetres. Development sampling
over a distance of 17.9 metres for the UK9a Reef gave an average value of 19.79
grams per tonne over a channel width of 14.5 centimetres, for a diluted value of
2.87 grams per tonne over a 100 centimetre mining width. Although the sampling
on the UK9a Reef to date has been very limited, initial indications suggest a
good correlation between the UK9a Reef forecast grades from the mineral resource
model and the actual results obtained.
Figure 8: Total Development Metres
(For the release with pictures and schematics, please refer to the company`s
website: www.gold1.co.za)
3.2.3. Modder East Processing Plant
The total number of tonnes milled during the quarter increased by 26% to 157,883
tonnes while metallurgical plant efficiencies remained consistent with
metallurgical recoveries of 96% being achieved. Modder East recovered grades of
5.74 grams per tonne were achieved, with the decrease in recovered grade being
partially attributable to the treatment of low grade development ore milled
during the quarter as described in Section 3.2 of this report. Excluding the
low grade development ore processed, recovered grades of 6.05 grams per tonne
were achieved.
Of the total gold produced during the June 2011 quarter, 44% was recovered
through the Knelson Concentrator exceeding initial planned recoveries of
approximately 40%. The introduction of this gravity circuit has also ensured
that metallurgical recoveries have remained above 95% despite significant
increases in throughput and reduced head grades associated with the lower grade
development ore treated.
3.3. Sub Nigel
Sub Nigel June 2011 March 2010
Quarter Quarter
Ore Mined Underground 6 713 t 3 940 t
Mined Grade 3.55 g/t 3.57 g/t
Milled Tonnes 7 840 t 1 483 t
Recovered Grade 3.29 g/t 3.45 g/t
Gold Recovery 92% 92%
Gold Produced 828 oz 165 oz
During the quarter, a total of 7,840 tonnes from Sub Nigel were processed
through the Modder East metallurgical plant, of which 6,713 tonnes were mined
during the quarter while the balance was sourced from a stockpile carried over
from the March 2011 quarter. Mined and recovered grades remained constant at
3.55 and 3.29 grams per tonne respectively, resulting in the production of 828
ounces from Sub Nigel for the June 2011 quarter.
On 8 June, 2011, Goliath Gold, formerly WWR, announced the temporary closure of
the Sub Nigel training centre due to the rising water level in the shaft (the
Sub Nigel shaft is included in the Gold One Megamine assets that are in the
process of being sold to Goliath Gold). The rising water levels have not yet
reached critical stages, however, the closure of the training centre at the Sub
Nigel 1 Shaft was deemed as prudent and necessary in the interest of the safety
of employees. On 15 June, 2011, Sub Nigel 1 Shaft`s 19 Level flooded but
operations are continuing safely at the loading station and on 17 Level. It is
estimated that all mining operations will have to cease towards the end of the
September 2011 quarter. Currently water levels in the shaft are monitored daily
to ensure the continued safety of employees.
The sale of Megamine to Goliath Gold was formally announced via a joint
announcement released by Gold One and WWR, released on the ASX Company
Announcements Platform and the Securities Exchange News Service ("SENS") on 13
October, 2010.
4. Exploration and Projects
4.1. Modder East
Following on from the successful 2010 surface exploration campaign at Modder
East, three additional boreholes (DD70, DD71 and DD72) were completed during the
March and June quarters of 2011. This drilling was aimed at determining a
possible easterly extension of the Black Reef orebody.
DD70 was drilled approximately 150 metres to the southeast of DD69. Although
the first two intersections only contained a thin Black Reef Channel Facies,
these intersections were complicated by faulting in the borehole. The third
intersection (deflection 2) did, however, intersect a moderately well developed
BPLZ Facies at a depth of 259 metres, grading at 15.42 grams per tonne over a
channel width of 46 centimetres (7.10 grams per tonne over a minimum mining
width of 100 centimetres). This intersection has confirmed the extension of
Black Reef to the east and future exploration drilling in this area is currently
being considered. DD71 was drilled approximately 150 metres to the east of DD68
but intersected a poorly developed BPLZ Facies. While the deflection
intersections did not contain any notable mineralisation, the original
intersection was mineralised containing 15.9 grams per tonne over an 18
centimetre channel width (equating to 2.92 grams per tonne over a minimum 100
centimetre mining width). The nature of this intersection is similar to
underground observations on or close to the shoreline position. DD72 was drilled
140 metres north of DD66 to determine the northern extension of the shoreline.
The BPLZ was poorly developed, although the underlying Channel Facies was
intersected. This intersection is interpreted as being beyond the shoreline
position and thus defines the northern extent of the BPLZ in this area.
The results of this drilling will be incorporated into the updated Modder East
resource statement, to be published during the December quarter of 2011. A total
cost of US$ 0.21 million was allocated for the Modder East exploration project
during the June 2011 quarter.
Figure 8: Map of boreholes
(For the release with pictures and schematics, please refer to the company`s
website: www.gold1.co.za)
BH_ID REEF Depth Dip Corrected
(m)
Bottom
Contact
Channel g/t 2 cm.g/t Grams per
Thickness Tonne over
(cm) 1 100 cm Mining
Width 3
DD70 BPLZ 256.75 9 0.99 9 0.09
DD70 BR BASAL 259.68 125 0.04 5 0.05
UNIT
DD70_1D BR BASAL 259.14 812 0.01 8 0.08
UNIT
DD70_2D BR BASAL 257.55 123 0.10 12 0.12
UNIT
DD70_2D BPLZ 258.94 46 15.42 710 7.10
DD71 BPLZ 252.93 18 15.87 292 2.92
DD71_1D BPLZ 252.35 21 0.27 6 0.06
DD71_2D BPLZ 249.84 29 0.18 5 0.05
DD72 BPLZ 254.03 55 0.07 4 0.04
DD72 BR BASAL 257.34 323 0.07 24 0.24
UNIT
DD72_1D BPLZ 254.88 61 0.08 5 0.05
DD72_1D BR BASAL 255.29 40 0.04 2 0.02
UNIT
DD72_1D BR BASAL 257.40 157 0.07 11 0.11
UNIT
1. Channel thickness represents the true dip corrected thickness of the Reef.
Dip corrections are undertaken based on dip measurements from core bedding
angles.
2. Represents the average grade over the true thickness of the total reef,
calculated using a weighted average of assayed grade from individual samples
over the total channel thickness (individual sample lengths are typically
between 15 centimeters and 30 centimeters).
3. Represents the diluted grade over a minimum mining width. Grade is diluted
to 100 centimeters at 0 grams per tonne.
4.2. Ventersburg
The pre-feasibility study completed at the end of the March 2011 quarter has
undergone extensive review by the company. This study was based on the updated
Ventersburg mineral resources declared in December 2010, which recognised two
broad higher grade payshoots separated by a lower grade central area. This
revised resource model impacted on the initial (scoping study) mine plan in
terms of requiring additional development capital expenditure to exploit the
higher grade western payshoot and also delayed ramp up to full production as the
shaft position was placed to access both payshoots. The review undertaken has
indicated that the pre-feasibility study could potentially be significantly
optimised and enhanced through the addition of shallower resources, which could
facilitate more rapid orebody access and support the required increase in
development capital.
In this regard, a possible shallow extension to the eastern-most payshoot has
been modelled and drilling within this area is well underway. To date, this
drilling has yielded results confirming a shallow high grade extension to the
east, discussed in detail below. In light of these recent drill intersections,
the company will finalise the eastern area drill programme and the results will
be utilised to update and optimise the pre-feasibility study. Drilling is
planned to be completed by the beginning of the December 2011 quarter and the
updated pre-feasibility study is to be completed by December 2011.
Figure 9: Map of boreholes
(For the release with pictures and schematics, please refer to the company`s
website: www.gold1.co.za)
Seven boreholes were completed during the quarter comprising 4,157 metres at a
total cost of US$ 0.97 million. Final assay results for two of these boreholes
are still outstanding. The results obtained to date (including boreholes AFO-
052, AFO-053 and AFO-054, which were drilled during the March 2011 quarter but
located within the eastern drill programme area) are illustrated in the table
below. Of the boreholes completed, AFO-045, AFO-052 and AFO-053 have all
contained grades in excess of the average indicated mineral resource grade. In
addition, boreholes AFO-066 and AFO-071 have intersected well mineralised A Reef
with geological characteristics similar to those intersected in the other
boreholes drilled in the eastern target area. Assay results for these
boreholes, however, are still outstanding.
Drilling in this area has refined the sub-outcrop position, which is of
significance regarding potential shaft positioning. Boreholes AFO-044 and AFO-
056 intersected a fault loss, which has been incorporated into updated
structural models for the eastern area.
See drilling results tabled on the next page.
BH_ID REEF Depth (m) Dip Corrected
Bottom
Contact
Channel g/t 2 cm.g/t
Thickness
(cm) 1
AFO-044 Reef faulted out
AFO-045 A 525.52 107 4.70 505
REEF
AFO-045_1D A 525.33 108 7.48 804
REEF
AFO-045_2D A 525.07 103 3.82 392
REEF
AFO- A 660.67 57 10.33 590
052_Orig REEF
AFO-052_1D A 654.61 66 13.96 926
REEF
AFO-052_2D A 655.57 65 10.36 677
REEF
AFO- A 533.31 66 5.64 372
053_Orig REEF
AFO-053_2D A 535.53 67 8.14 542
REEF
AFO-053_3D A 534.38 65 7.75 501
REEF
AFO- A 420.30 304 2.56 777
054_Orig REEF
AFO-054_1D A 420.10 287 3.27 940
REEF
AFO-054_3D A 420.35 297 1.46 433
REEF
AFO-056 Reef faulted out
AFO-061 No A Reef, beyond sub-outcrop
AFO-062 No A Reef, beyond sub-outcrop
AFO-066 A 782.03 Assay results outstanding
REEF
AFO-071 A 601.77
REEF
Notes
1. Channel thickness represents the true, dip corrected thickness of the
Reef. Dip corrections are undertaken based on dip measurements from
core bedding angles.
2. Represents the average grade over the true thickness of the total
reef, calculated using a weighted average of assayed grade from
individual samples over the total channel thickness (individual sample
lengths are typically between 15 centimetres and 30 centimetres).
4.3. Megamine
Project activities during the June 2011 quarter focused on continued enhancement
of the geological and exploration models on both local and regional scales. The
current exploration programme for the Megamine area has a dual focus comprising
continued desktop studies to capture additional historical information and a
surface exploration drilling programme that commenced at the end of the March
2011 quarter.
The Megamine desktop studies undertaken during 2010 are continuing, including
the capturing of historical data with a particular focus on the Wit Nigel
property (the southern property contiguous to Megamine comprising the
prospecting right belonging to Goliath Gold, formerly WWR) and the areas to the
east of Megamine. This information continues to facilitate the definition of
detailed grade distribution and structural models. During the quarter, an
additional 31,223 survey pegs (to facilitate three dimensional structural
modelling) and 37,312 underground grade sample data points were captured. This
information has been incorporated into the existing geological models as
illustrated below.
Figure 10: Geological model
(For the release with pictures and schematics, please refer to the company`s
website: www.gold1.co.za)
The surface exploration drilling programme has been designed to confirm the
possible higher grade payshoot extensions from the mined areas in Spaarwater, up
dip (to the south) into the Wit Nigel and Spaarwater prospecting areas. Three
drill rigs are currently employed at Megamine and the drill programme,
comprising a total of 14 boreholes, is planned to be completed by the December
2011 quarter. To date three boreholes have been completed (SPNR1, SPNR3 and
SPNR5) and assay results from the first intersection of a fourth borehole
(SPNR6) have been received. During the quarter under review, a total of
3,161 metres were drilled and total exploration expenditure (including
historical data capture) amounted to US$ 1.08 million. Although assay results
from some of the deflections are still outstanding, the results received to date
are illustrated below.
Figure 11: Geological model
(For the release with pictures and schematics, please refer to the company`s
website: www.gold1.co.za)
BH_ID REEF Depth (m) Dip Corrected
Bottom
Contact
Channel g/t 2 cm.g/t
Thickness
(cm) 1
SPNR1 MAIN_REEF 621.62 57 37.55 2145
SPNR1_1D MAIN_REEF 621.95 65 11.59 753
SPNR1_2D MAIN_REEF 621.78 54 17.81 965
SPNR1_3D MAIN_REEF 621.96 49 8.69 428
SPNR1_4D MAIN_REEF 622.13 56 10.81 607
SPNR3 MAIN_REEF 437.51 18 1.69 30
SPNR3_2D MAIN_REEF 437.44 12 0.44 5
SPNR5 MAIN_REEF 528.82 24 0.10 2
SPNR5_1D MAIN_REEF 528.88 20 1.12 22
SPNR6 MAIN_REEF 418.81 33 5.66 184
1 Channel thickness represents the true dip corrected thickness of the reef. Dip
corrections are undertaken based on dip measurements from core bedding angles.
2 Represents the average grade over the true thickness of the total reef,
calculated using a weighted average of assayed grade from individual samples
over the total channel thickness (individual sample lengths are typically
between 15 centimetres and 30 centimetres).
The exploration drilling results obtained to date have confirmed the geological
models in so far as potentially indicating extensions to the higher grade
payshoot mined at Spaarwater. In addition, detailed sedimentological
information obtained from the boreholes (for example possible footwall controls
on gold mineralisation) is being utilised to update existing models to identify
further potential areas of higher grade mineralisation within the Megamine
project.
In addition to the ongoing exploration drilling and continued collection of
historical information, Gold One has contracted the services of Turgis
Consulting (Proprietary) Limited to undertake a conceptual study of the Megamine
and Goliath Gold properties. This study has identified the potential to utilise
existing shaft infrastructure combined with new surface declines to access the
modelled Main Reef orebody. The study has provided indicative cost structures
for mining the up dip portions of the Megamine project, which will assist in
refining the ongoing exploration programmes. The study will be updated during
the December 2011 quarter to incorporate the findings of the current surface
exploration drilling programme.
4.4. East Rand Boundary Project
Gold One`s East Rand Boundary Project is evaluating the shallow Main Reef
potential of the company`s New Kleinfontein, Turnbridge and Modder North
properties.
4.4.1. Modder North
The Modder North project is located approximately five kilometres north of
Modder East and is within the current mining licence area of Modder East. As
such, pending successful exploration results, this project could be
significantly fast tracked into production by utilising the existing Modder East
metallurgical processing facility and complimenting production from Modder East.
Importantly, the primary target at Modder North is an unmined virgin resource
that can be accessed and mined in a way that does not link into the mined out
areas. As such, similar to Modder East, mining of this deposit will not be
affected by rising water levels in historic underground workings.
The project is primarily targeting the down dip extension of the historically
mined Main Reef. During 2010, access was gained to the existing underground
workings and resampling of the underground exposures was undertaken. In total
1,503 samples were collected. This resampling programme verified the historic
sampling database, which was utilised to identify priority drill targets in the
area as well as to define a maiden resource for the Modder North property. A
portion of the current estimated resources is located within the existing mined
out areas. However, these areas are at risk of flooding given the recent
cessation of pumping at the adjacent Grootvlei operations. Prior to publishing
the mineral resource the impact of this flooding as well as results of the
current exploration drilling programme will be incorporated into the estimation.
The historic underground sample database and the proposed drilling layout for
the current exploration programme are illustrated in the figure below. The
initial surface exploration programme considered five surface exploration
boreholes targeting the Main Reef at maximum depths up to 550 metres. This
drilling commenced during the quarter under review with the first borehole
having been completed by the end of the quarter. A total of 809 metres of
drilling was completed during the June 2011 quarter at a total cost of US$ 0.15
million.
Figure 12: Geological model
(For the release with pictures and schematics, please refer to the company`s
website: www.gold1.co.za)
In addition to the Main Reef, the first borehole, MN1, intersected Black Reef
(the primary reef horizon mined at Modder East) at a depth of 168 metres below
surface. This intersection yielded a grade of 3.80 grams per tonne
over a reef width of 50 centimetres. Although this grade is relatively low by
Modder East standards, it is significant in terms of potentially defining a
favorable environment for the development of Black Reef previously mined in
other areas of the East Rand Basin. In addition, borehole MN3 has recently
intersected a well developed and mineralised Black Reef (assay results for this
borehole are still outstanding) confirming that this orebody is a significant
additional exploration target within the Modder North property.
A scoping study for the Modder North property has commenced and will be
undertaken in parallel with the current exploration programme so as to fast
track the potential production opportunity at Modder North. Pending successful
exploration results, the scoping study could be rapidly upgraded to a pre-
feasibility study to determine the viability of accessing and commencing
production.
Two deflections were completed on both the Main Reef and the Black Reef targets
in borehole MN1; the assay results from the deflections are still outstanding.
The first Main Reef intersection yielded a low grade of 0.31 grams per tonne
over a reef thickness of 10.27 centimetres. Although this result is
disappointing, variation in the Main Reef mineralisation is not uncommon (as was
observed in the underground sampling exercise) and this single result does not
preclude further possible higher grade intersections in the planned drilling
area.
BH_ID REEF Depth Dip Corrected
(m)
Bottom
Contact
Channel g/t 2 cm.g/t Grams per
Thickness Tonne over
(cm) 1 100 cm
Mining
Width 3
MN_1 BPLZ 167.75 50 3.80 189
1.89
MN 1 MAIN 435.01 10 0.31 3 0.03
REEF
4.4.2. New Kleinfontein and Turnbridge
The primary exploration target at Gold One`s New Kleinfontein and Turnbridge
properties is the shallow remnant (unmined) portions of the Main Reef. During
2010, access to these historical underground workings was gained and resampling
at the Turnbridge property was undertaken. In excess of 2,000 samples for 567
complete sample sections were collected and the information was utilised to
update geological models and resource estimates. The resource estimate was
completed during the quarter by SRK Consulting (SA) (Proprietary) Limited ("SRK
Consulting").
However, the deeper portions of the updated resource estimate are currently at
risk of flooding given the recent cessation of pumping at the adjacent Grootvlei
operations. Prior to publishing the current resource estimation the impact of
this flooding will be incorporated into the resource estimation. This is
anticipated to be completed during the September 2011 quarter.
On the basis of this updated resource estimate a detailed scoping study has been
completed at the company`s Turnbridge property. This study has targeted only
the shallower portions of the updated resource (those areas that will not be
affected by flooding) and incorporates the new sampling information collected
during 2010. The scoping study has suggested positive results for the project,
indicating a potential life of mine of some nine years producing approximately
5,500 ounces per annum at steady state from production volumes of approximately
4,000 tonnes per month. Total costs (including capital) are forecast to be
approximately between US$ 700/oz and US$ 750/oz. Gold One is currently
evaluating strategic alternatives regarding the further development of this
asset.
For the year to date, the total expenditure incurred at the New Kleinfontein
project has been US$ 0.28 million, of which US$ 0.11 million was incurred during
the June 2011 quarter.
4.5 Tulo
In 2010, Gold One`s priority focus was to successfully ramp up production at
Modder East. During this period, the company`s cash resources were conserved to
accommodate this focus and, as such, little development was undertaken on the
company`s earlier stage exploration projects. However, given the successful ramp
up in production at Modder East over the last few quarters, additional resources
have since been allocated to progressing exploration projects, in particular
Tulo.
The Tulo project is situated 20 kilometres south of the Tanzanian border in
northwestern Mozambique. Two types of gold mineralisation are recognised on the
property, namely, primary gold mineralisation associated with steeply dipping
shear hosted quartz veins and alluvial gold. The company`s primary objective is
the exploration and development of the primary gold mineralisation target. It
has been reported, however, that up to 50 kilograms of gold per month have been
mined in the alluvial mineralised areas by informal alluvial gold miners,
confirming the prospectivity of the project area.
Figure 13: Map of project area
(For the release with pictures and schematics, please refer to the company`s
website: www.gold1.co.za)
Although the Tulo concession has historically been recognised as a prospective
gold region, exploration and mining has been severely hindered due to access.
A single dirt track links the project site to the provincial capital, Lichinga,
which is situated approximately 200 kilometres to the south. During the wet
season the dirt track is impassible. Gold One has managed to establish an
alternative access route to the site utilising Lake Malawi for primary access.
As a result an exploration base has been established on Lake Malawi,
approximately 20 kilometres from the Tulo exploration target. The earth moving
equipment necessary to build an access road to site allowing for the
mobilisation of drill rigs has already been transported to site. During the
quarter, 10 kilometres of road development was completed, which is anticipated
to reach the initial drill targets by October 2011.
Gold One has engaged the services of Fugro Airborne Surveys (Proprietary)
Limited to undertake an airborne geophysical survey of the Tulo project and the
surrounding areas during the December 2011 quarter. This survey will include at
least magnetic, radiometric and digital elevation model surveys to facilitate
positioning of initial drill targets. Surface mapping and associated ground
truthing of the geophysical survey are planned to be undertaken during the
December 2011 quarter and drilling is planned to commence in early 2012.
Total exploration expenditure at Tulo for the year to date has amounted to US$
0.31 million, of which US$ 0.12 million was incurred during the quarter
under review.
5. Corporate Development
5.1. Goliath Gold (Formerly WWR)
On 13 October, 2010, Gold One announced the proposed creation of Goliath Gold,
formerly WWR, through the disposal of Gold One Africa Limited`s ("Gold One
Africa") Megamine business to Goliath Gold for ZAR 262 million, to be
paid in Goliath Gold shares resulting in Gold One owning 71% of Goliath Gold.
Vending Gold One`s Megamine assets into Goliath Gold will allow for these medium
depth resources to be fully developed through Goliath Gold, while not detracting
from Gold One`s focus on the development of shallow resources or negatively
impacting Gold One`s strong cash flow status. In addition, the Wit Nigel
Prospecting Right currently held by Goliath Gold is located adjacent to Gold
One`s Megamine assets and will benefit from the regional geological modelling
already undertaken at the Megamine project. Gold One has already entered into a
management contract with Goliath Gold such that both parties benefit from the
synergy of shared costs, management and technical expertise.
The Goliath Gold transaction is progressing well with, as was previously
advised, Goliath Gold shareholders having approved the transaction on 22 March,
2011. The remaining conditions precedents are in the process of being fulfilled
and, as was further advised on 20 June, 2011, the date for such fulfillment has
been extended by mutual agreement between the parties from 30 June, 2011, to 30
September, 2011, to accommodate, inter alia, Department of Mineral Resources
("DMR") approval timelines.
Refer to the joint announcement released by Gold One and WWR, released on the
ASX Company Announcements Platform and SENS on 13 October, 2010.
5.2. Rand Uranium
On 24 May 2011, Gold One announced that, subsequent to a competitive sales
process, it had signed a sale of shares agreement to acquire 100% of Rand
Uranium for a purchase price of US$ 250 million. Rand Uranium`s assets and
operations are situated in the West Rand, 30 kilometres from Johannesburg, South
Africa, and were recorded in Rand Uranium`s own financial reports for the year
ended 31 March, 2011, as having a carrying value of over US$ 500 million.
Gold One`s expectation is that the purchase price of US$ 250 million (in Gold
One`s opinion and following the competitive sales process in which Gold One
participated) reflects the current market value to be ascribed to the Rand
Uranium assets and operations. Gold One is of the opinion that this acquisition
will benefit company growth once the restructuring of operations, focus on gold
production, and implementation of the uranium co-product strategy is underway.
The latter is envisaged to be implemented in 2015.
Gold One submitted its application to the Competition Commission on 28 June,
2011, and anticipates receiving a response during the September 2011 quarter.
Until approval has been received from the Competition Commission, Gold One is
unable to actively partake in either management or operational direction of Rand
Uranium and the Cooke Operations. Following Competition Commission approval, it
is envisaged that Gold One will begin fulfilling a more active role in managing
the business and that the company will potentially be in a position to consider
some form of operational reporting to the market.
The Rand Uranium acquisition is progressing well. The conditions precedent are
all currently on track to be fulfilled on or before the dates stipulated in the
amended sale of shares agreement. Submissions have also already been made to the
competition authorities and the South African Reserve Bank`s Exchange Control
Department. The main areas of focus are now on the Section 11 filing with the
DMR and the finalisation of the funding arrangements for the acquisition.
Refer to "Gold One to Acquire 100% of Rand Uranium", released on the ASX Company
Announcements Platform and SENS on 28 April, 2011.
5.3 Jintu Transaction
On 16 May, 2011, Gold One announced that it had entered into an agreement to
implement a transaction with a consortium of Chinese investors, whereby the
consortium is seeking to become Gold One`s major shareholder and long term
strategic partner through both a takeover offer and subscription. With the
consortium`s support Gold One will be ideally positioned to partake in the
future consolidation of the African and international gold mining industries.
The consortium shares in, and supports, Gold One`s business and growth
strategies with both entities having identified various areas in which
complementary skills can be leveraged.
The takeover offer and subscription by the consortium is progressing well. The
notice of meeting and explanatory memorandum regarding the subscriptions, which
incorporates the independent expert`s report, the bidder`s statement and the
target`s statement regarding the takeover offer, are expected to be issued in
due course; this issue will trigger the opening of the offer. The general
meeting of Gold One shareholders is expected to be held in late August or early
September, 2011, to approve, inter alia, the subscription. The other conditions
precedent are underway and submissions have been made to, inter alia, the South
African and Namibian competition authorities, the Australian Securities and
Investments Commission, the ASX Limited, the JSE Limited, the South African
Takeover Regulation Panel, the South African Reserve Bank`s Exchange Control
Department and various Peoples Republic of China regulatory bodies.
Independent of the above transaction, the consortium, through a subsidiary of
one of its members, acquired the 142,689,350 Gold One shares previously held by
Navada Trading (Proprietary) Limited, a subsidiary of African Global Capital
(SA) (Proprietary) Limited.
Refer to "Cash Offer to Gold One Shareholders of A$ 0.55 per Share", release on
released the ASX Company Announcements Platform and SENS on 16 May, 2011.
6. Outlook
The company has continued to build on the solid foundation that it has
established throughout this year. For the September 2011 quarter, 34,000 ounces
of gold production are being targeted and all necessary development and
infrastructure is in place to ensure achievement of the company`s annual gold
production target of 120,000 ounces.
Solid operating results have also created significant value and stability for
Gold One to consider value accretive external growth opportunities. Two such
growth opportunities, namely, the Rand Uranium transaction and the Jintu
transaction, have already been announced. Shareholders have indicated strong
support for these two transactions and Gold One is looking forward to closing
these transactions during the latter half of this year. It is anticipated that
further progress and development within the company`s project pipeline will also
create significant shareholder value.
7. Capital Structure
As of the release of this report, the company has 808,989,951 shares in issue,
of which 579,920,575 (71%) are held on the Australian register and 234,569,376
(29%) are held on the South African register. The company has 86,674,632 listed
and unlisted options in issue.
Figure 14: ASX trading statistics for the quarter ended 30 June 2011
(For the release with pictures and schematics, please refer to the company`s
website: www.gold1.co.za)
Figure 15: JSE trading statistics for the quarter ended 30 June 2011
(For the release with pictures and schematics, please refer to the company`s
website: www.gold1.co.za)
Parktown, Johannesburg
26 July 2011
MACQUARIE FIRST SOUTH ADVISERS (PTY) LIMITED
JSE Sponsor
Issued by Gold One International Limited
www.gold1.co.za
For further information contact:
Neal Froneman Ilja Graulich
President and CEO Investor Relations
+27 11 726 1047 (office) +27 11 726 1047 (office)
+27 83 628 0226 (mobile) +27 83 604 0820 (mobile)
neal.froneman@gold1.co.za ilja.graulich@gold1.co.za
Carol Smith Derek Besier
Investor Relations Farrington National Sydney
+27 11 726 1047 (office) +61 2 9332 4448 (office)
+27 82 338 2228 (mobile) +61 421 768 224 (mobile)
carol.smith@gold1.co.za derek.besier@farrington.com.au
About Gold One
Gold One is a gold producer listed on the financial markets operated by the ASX
Limited and the JSE Limited, issuer code GDO. Its flagship operation is the
newly built shallow Modder East mine on the East Rand, some 30 kilometres from
Johannesburg.
Modder East is the first new mine to be built in the region in 28 years and
distinguishes itself from most of the other gold mines in South Africa owing to
its shallow nature (300 metres to 500 metres below surface). To date Modder East
has provided direct employment opportunities for over 1,500 people. Gold One
also owns the nearby existing Sub Nigel mine, which is used primarily as a
training centre in the build-up of Modder East to full production. Gold One`s
other projects and targets include Ventersburg in the Free State Goldfields, the
Tulo concession in Mozambique and the Etendeka greenfield project in Namibia.
Office Details
Sydney Head Office
Level 3, 100 Mount Street,
North Sydney, NSW 2060
Australia
PO Box 1244 North Sydney NSW 2059
Telephone: +61 2 9963 6400
Fax: +61 2 9963 6499
Johannesburg Corporate Office
45 Empire Road, First Floor
Parktown, 2193
Gauteng, South Africa
Telephone: +27 11 726 1047
Fax: +27 11 726 1087
Issued Capital
808,989,951 shares in issues
Options (listed and unlisted: 86,674,632)
ADR ratio: 1 ADR = 10 ordinary shares
Stock Exchange Listings
ASX/JSE Limited: GDO
OTCQX International: GLDZY
Directors
- N J Froneman (President and CEO)
- C D Chadwick (Chief Financial Officer)
- M K Wheatley (Non-Executive Chairman)
- B E Davison (Non-Executive Director)
- K V Dicks (Non-Executive Director)
- W B Harris (Non-Executive Director)
- S Swana (Non-Executive Director)
- K J Winters (Non-Executive Director)
Company Secretaries
- K M Pickering
- P B Kruger
Registrars
Boardroom Limited
Level 7
207 Kent Street
Sydney
NSW
Australia
2000
Tel: +61 2 9290 9600
South African Transfer Secretaries
Computershare Investor Services
70 Marshall Street
Johannesburg
2001
Level 1 ADR Sponsor
The Bank of New York Mellon
Depositary Receipts Division
101 Barclay St, 22nd Floor
New York, New York 10286
USA
Tel: +1 212 815 3700
Fax: +1 212 571 3050
Auditors
PricewaterhouseCoopers Incorporated
201 Sussex Street
Sydney, NSW 1171
Australia
Telephone: +61 2 8266 0000
This news release does not constitute investment advice. Neither this news
release nor the information contained in it constitutes an offer, invitation,
solicitation or recommendation in relation to the purchase or sale of securities
in any jurisdiction.
Forward-Looking Statement
This release includes certain forward-looking statements and forward-looking
information. All statements other than statements of historical fact included in
this release including, without limitation, statements regarding future plans
and objectives of Gold One International Limited are forward-looking statements
(or forward-looking information) that involve various risks, assumptions and
uncertainties. There can be no assurance that such statements will prove to be
accurate and actual values, results and future events could differ materially
from those anticipated in such statements. Important factors could cause actual
results to differ materially from Gold One`s expectations. Such factors include,
among others: the actual results of exploration activities; actual results of
reclamation activities; the estimation or realisation of mineral reserves and
resources; the timing and amount of estimated future production; costs of
production; capital expenditures; costs and timing of the development of Modder
East and new deposits; availability of capital required to place Gold One`s
properties into production; the ability to obtain or maintain a listing in South
Africa, Australia, Europe or North America; conclusions of economic evaluations;
changes in project parameters as plans continue to be refined; future prices of
gold and other commodities; possible variations in ore grade or recovery rates;
failure of plant, equipment or processes to operate as anticipated; accidents;
labour disputes and other risks of the mining industry; delays in obtaining
governmental approvals, permits or financing or in the completion of development
or construction activities, economic and financial market conditions; political
risks; Gold One`s hedging practices; currency fluctuations; title disputes or
claims limitations on insurance coverage. Although Gold One has attempted to
identify important factors that could cause actual results to differ materially,
there may be other factors that cause results not to be as anticipated,
estimated or intended.
Any forward-looking statements in this release speak only at the time of issue.
There can be no assurance that such statements will prove to be accurate as
actual values, results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. Gold One does not undertake to update
any forward-looking statements that are included herein, or revise any changes
in events, conditions or circumstances on which any such statement is based,
except in accordance with applicable securities laws and stock exchange listing
requirements.
Competent Person
The information in this release that relates to exploration results, mineral
resources or ore reserves is based on information compiled by Dr Richard
Stewart, who has a doctorate in geology and who is a professional natural
scientist registered with the South African Council for Natural Scientific
Professions (SACNASP), membership number 400051/04. Dr Stewart is also a member
of the Geological Society of South Africa (GSSA) and Senior Vice President:
Business Development for Gold One, with which he is a full-time employee. He has
10 years` experience which is relevant to the style of mineralisation and type
of deposit under consideration, and to the activity which he is undertaking, to
qualify as a Competent Person for the purposes of both the 2004 Edition of the
Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves (JORC Code) and the 2007 Edition of the South African Code for
Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC
Code).
Dr Stewart consents to the inclusion in this release of the matters based on
information compiled by Gold One employees and it`s consultants in the form and
context in which they appear. Further information on Gold One`s resource
statement is available in the pre-listing statement of Gold One International
Limited issued on 19 December 2008 and in the resource statements released by
Gold One on the ASX Announcements Platform and the Stock Exchange News Service
(SENS) on 11 October 2010 (Megamine), 7 December 2010 (Ventersburg), and 15
December 2010 (Modder East) and in the 2010 Annual Report released on 28
February 2011.
SAMREC and JORC Terminology
In addition, this release uses the terms `indicated resources` and `inferred
resources` as defined in accordance with the SAMREC Code, prepared by the South
African Mineral Resource Committee (SAMREC), under the auspices of the South
African Institute of Mining and Metallurgy (SAIMM), effective March 2000 or as
amended from time to time and where indicated in accordance with the Canadian
National Instrument 43-101 - Standards for Disclosure for Mineral Projects. The
terms `indicated resources` and `inferred resources` are also defined in the
2004 Edition of the JORC Code, prepared by the Joint Ore Reserves Committee
(JORC) of the Australasian Institute of Mining and Metallurgy (AusIMM), the
Australian Institute of Geoscientists (AIG) and the Minerals Council of
Australia (MCA). (The use of these terms in this release is consistent with the
definitions of both the SAMREC Code and the JORC Code.)
A mineral reserve (or `ore reserve` in the JORC Code) is the economically
mineable part of a measured or indicated resource demonstrated by at least a
preliminary feasibility study. This study must include adequate information on
mining, processing, metallurgical, economic and other relevant factors that
demonstrate at the time of reporting that economic extraction can be justified.
A mineral reserve includes diluting materials and allows for losses that may
occur when the material is mined. A proven mineral reserve (or `proved ore
reserve` in the JORC Code) is the economically mineable part of a measured
resource for which quantity, grade or quality, densities, shape and physical
characteristics are so well established that they can be estimated with
confidence sufficient to allow the appropriate application of technical and
economic parameters to support production planning and evaluation of the
economic viability of the deposit. A probable mineral reserve (or `probable ore
reserve` in the JORC Code) is the economically mineable part of an indicated
mineral resource for which quantity, grade or quality, densities, shape and
physical characteristics can be estimated with a level of confidence sufficient
to allow the appropriate application of technical and economic parameters to
support mine planning and evaluation of the economic viability of the deposit.
A mineral resource is a concentration or occurrence of natural, solid, inorganic
or fossilised organic material in or on the earth`s crust in such form and
quantity and of such a grade or quality that it has reasonable prospects for
economic extraction. The location, quantity, grade, geological characteristics
and continuity of a mineral resource are known, estimated or interpreted from
specific geological evidence and knowledge. A measured mineral resource is that
part of a mineral resource for which quantity, grade or quality, densities,
shape and physical characteristics can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and economic
parameters to support mine planning and evaluation of the economic viability of
the deposit. The estimate is based on detailed and reliable exploration,
sampling and testing information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drillholes that are
spaced closely enough to confirm both geological and grade continuity. An
indicated mineral resource is that part of a mineral resource for which
quantity, grade or quality, densities, shape and physical characteristics can be
estimated with a level of confidence sufficient to allow the appropriate
application of technical and economic parameters to support mine planning and
evaluation of the economic viability of the deposit. The estimate is based on
detailed and reliable exploration and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits, workings
and drillholes that are spaced closely enough for geological and grade
continuity to be reasonably assumed. An inferred mineral resource is that part
of a mineral resource for which quantity and grade or quality can be estimated
on the basis of geological evidence and limited sampling and reasonably assumed,
but not verified, geological and grade continuity. The estimate is based on
limited exploration and sampling gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drillholes. Mineral
resources which are not mineral reserves do not have demonstrated economic
viability. Investors are cautioned not to assume that all or any part of the
mineral deposits in the measured and indicated resource categories will ever be
converted into reserves. In addition, "inferred resources" have a great amount
of uncertainty as to their existence and economic and legal feasibility. It
cannot be assumed that all or any part of an inferred mineral resource will be
ever be upgraded to a higher category. Under South African and Australian rules,
estimates of inferred mineral resources may not form the basis of feasibility or
pre-feasibility studies or economic studies except under conditions noted in the
SAMREC Code and the JORC Code, respectively.
Investors are cautioned not to assume that all or any part of an inferred
resource exists or is economically or legally mineable. Exploration data is
acquired by Gold One and its consultants under strict quality assurance and
quality control protocols.
No stock exchange, securities commission or other regulatory authority has
approved or disapproved the information contained herein.
Date: 26/07/2011 07:57:58 Supplied by www.sharenet.co.za
Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
